When is the best time to buy New Zealand dollars with pounds?

The pound to New Zealand dollar exchange rate has risen to some of the best rates since the Referendum, rising to 1.9833 in November, presenting an excellent opportunity for Kiwi buyers with pounds. Since then a deterioration in the outlook for any UK Brexit deal, plus, the expectation the Kiwi will remain a favourable currency to hold, has seen the Kiwi claw back some losses. What can we expect for the rest of 2017 and when is the best time to buy New Zealand dollars with pounds?

The New Zealand dollar has been much weaker in Q4 of 2017 as concerns over the economic policies of the new Labour government take hold within financial markets. The markets are also not expecting any interest rate hike in New Zealand until perhaps 2019 as concerns over inflation rising globally remain subdued. The New Zealand economy also prefers a weaker dollar since it is a net exporter, by selling more goods overseas than it buys back, it is in their interest to see a weaker currency. Since this is exactly what is happening anyway through economic concerns it will suit the RBNZ (Reserve Bank of New Zealand) just fine!

I think the pending UK – EU Summit will be an important time to be looking at any currency exchanges as the strength and weakness of sterling are mainly attributable to this political concern. The UK and the pound need to see a safe passage through next week’s Summit where the EU will decide if the UK has made ‘sufficient progress’ to move to the second phase of negotiations which will focus on trade. If agreed sterling could push towards 2 Kiwis per pound, if it fails then we could easily fall below 1.90.

If you have a transfer buying or selling New Zealand dollars for pounds we also have the US Federal Reserve Interest rate decision next week which could be a real market mover. The rise and fall of the US dollar according to sentiments on interest rates in the US, can trigger movements on the NZD as investors adjust their holdings to take stock of changes in outlook. A strong dollar could see a weaker Kiwi and vice versa.

If you have a transfer to make and wish for some informed and expert opinion on the best way to manage an exchange, at the very best rates of exchange, please contact myself, Jonathan Watson by emailing [email protected].

Thank you for reading and I look forward to hearing from you.